Coal news and updates

Most of Australia’s coal-fired power plants are running at a loss as electricity prices continue to slide, battering the profits of energy giants AGL and Origin and sparking warnings from within the industry of earlier-than-expected plant closures.

 

An influx of renewable energy has been driving down daytime electricity prices and piling enormous pressure on the nation’s fleet of coal-fired power stations, which are far more expensive to operate and, increasingly, struggling to compete.

 

New figures reveal baseload electricity prices in Victoria have crashed 70 per cent from about $80 a megawatt-hour in March 2020 to $24 this month. In New South Wales, prices have more than halved to $38.

 

“The price falls would place most baseload thermal generation into negative profitability,” JPMorgan analyst Mark Busuttil said. “An announcement of capacity closures could come any day.”

 

Industry sources, not authorised to speak publicly about internal discussions, confirmed meetings were held last week about the severity of the situation and there was now a “consensus” that at least one coal plant was likely to close its doors in response to unsustainable prices and spiralling losses.

 

Older power plants are considered to be most at risk of closure, they said, due to their inability to easily ramp output up and down in response to pricing and demand.

 

“I think the first one is the inflexible baseload plant would be at risk, but that’s probably as far as I’d go to speculate which plant comes out,” Origin Energy chief Frank Calabria said in February. “I just think it’s actually going to be a pretty messy period of time.”

 

Price falls across the nation’s main grid have been driven largely by the pandemic-led downturn in energy demand, a cooler-than-usual summer and the accelerating rollout of wind and solar farms and rooftop solar panels.

 

Source : https://www.smh.com.au/business/companies